Outsourcing App Development: Guide, Costs, and Tips
- Updated: Nov 14, 2024
- 20 min
CEO
Getting a startup off the ground requires launching as soon as possible.
However, hiring an in-house team of developers can cost thousands of dollars and take significant time.
A better alternative is to outsource mobile application development.
That’s why we’ve put together this detailed guide on how to outsource app development smartly. You’ll learn:
- What is outsourcing
- Reasons and benefits of IT outsourcing
- Why the outsourcing model is popular
- How to select a trusted development company
- And more
If you prefer visuals, check out the bonus infographic
Before starting your project, these essential app development tips can help you avoid common pitfalls.
Transform your ideas into reality with our dedicated development team — contact us today to get started!
What Is Outsourced Mobile App Development?
Hiring a third-party agency to develop your mobile app is called outsourcing mobile app development.
There are multiple models of outsourcing that businesses adopt, but offshore and nearshore outsourcing are the two major categories.
Offshore outsourcing refers to opting for an outsourcing partner in a foreign country. Most companies in developed countries like the US and Canada outsource using this model.
They hire agencies in developing countries where rates are lower. Ukraine, Mexico or India, and other developing countries are on top of the list. Hence such companies can save a lot of time and money.
Apart from saving time and money, there are multiple reasons why you should outsource app development. Which ones?
Here, we’ve enlisted the reasons you should opt for getting your mobile app developed by an external app development team instead of hiring an in-house team.
You should opt for getting your app development outsourced because:
- The app development process will be less time-consuming.
- The development will be much cheaper.
- IT outsourcing for small business is feasible for small startups and businesses.
- It often results in high-quality products.
- It helps you focus on the core business functions.
- It will help you hire international talent and not rely on nearshore talent only.
Apart from these, you get numerous other benefits if you decide to go with an outsourcing partner for your mobile app development.
Benefits of Outsourced Mobile App Development
Let’s talk about the benefits that you’ll get if you choose an outsourced mobile app development company over an in-house team.
1. Affordable and Fast
If you decide to outsource your mobile app development to third-party agencies, the first benefit will be time-saving.
Recruiting an in-house team is a time-consuming process. Hiring mobile app developers on your own sometimes takes months.
And, finding the right team member for you will be even more difficult.
You will have to consider the personality traits, work ethic and behavior, and many other aspects before hiring.
On the other hand, if you decide to outsource app development, you only have to find a reliable partner.
The agency will take care of everything and make the whole process a lot more simple. Let’s find out why.
2. App Development Company is a One-Stop Shop
Sometimes your business needs both the native Android app and the native iOS app at the same time. It will be a hell of a struggle to hire both types of mobile app developers.
In this case, app development companies provide a one-stop solution.
They already have native development teams of developers ready to start working on your app as soon as possible.
Moreover, here you’ll be able to find the full-service:
- Business analysis and creation of specification
- UX/UI design
- Both backend and frontend development
- And digital marketing as well
And the list does not end at the accessibility of services these app development companies offer.
3. Quality Final Product
The product that an experienced agency develops will be of premium quality.
The reason is a large number of similar projects under their belt.
The experience and skills enable such agencies to design and develop products loved by the audiences.
The reason is the same, as technical solutions straightly connected with the growth of the business expertise.
4. Focus On Core Business
If you spend your energy and time developing the app, who will do the other stuff?
A startup does not succeed based on the product but based on its values and strategies.
You should work on marketing, customer research, financing, and other business-related issues.
These are the factors that make or break your business.
Even though the app development project is of utmost importance, it should target the right market, and the business should have proper financial management.
How to Outsource Mobile App Development
Finding Outsourced App Developers
We are rooting for outsourcing app development because this is a system where you will get access to an entire team of mobile app developers at cost-effective prices.
There are five options to for finding an agency:
- Search on Google
- Find an agency from listings
- Look towards the freelance platforms
- Leverage the networking power of LinkedIn
- Get recommendations
1. Search on Google
Your initial searches will be the “cost of MVP development”, “cost of app design” or “how much does it cost to build an app”.
All these questions will have billions of results on Google SERPs, but the key is you shouldn’t go beyond the first.
Search for different terms, including application development and outsourcing.
Find out how the app development companies have listed their:
- Key features/functionality
- Share information on the blog as well as their website.
Take a look at how your potential service providers have organized their information.
Not only that but also check out how they have written the information and designed their website.
While searching through the SERPs, have a set of conditions in your mind.
This will help you filter out agencies to outsource mobile app development.
Look for an app development outsourcing company that shares the same set of values as you and wants to reflect the same in your product.
To outsource mobile app development means you have to find the proper organization that resembles your offerings.
You may also need to look at their costs, team composition, and past projects.
In other words, vet the potential development agency before app development outsourcing.
2. Look at the Listings
Websites like Clutch, GoodFirms, Bloomberg, and others will help you find the best software development agency for outsourcing.
They share the best organizations based on different sets of parameters.
You may find agencies listed based on:
- Their cost of operation,
- Rankings,
- The number of projects developed,
- and so on.
If needed, change the search variables.
This will help find the right type of software development company to outsource your mobile app development work.
Look for the service they offer, similar projects that they’ve done in the past, and their expertise.
Application outsourcing requires the founder to resonate with the development team.
You also need to understand their market value in terms of mobile development outsourcing.
For this:
- Gather social proof by visiting their social media handles.
- Look at the posts they have published along with the reviews and comments.
- Look for reviews on the listing websites and Google.
3. Search on Freelance Platforms
Freelance platforms like Upwork, Fiverr, Toptal, and others have a large repository of individual freelancers.
They also have teams who are ready for mobile development work via outsourcing.
However, there is a caveat attached to finding the required personnel for application development or an outsourcing firm from freelancer platforms.
You need to be adept with the concepts of development yourself before moving ahead with this option.
For instance, you should know about the app design process or stages of app development.
Also, it will be helpful to understand how to find and hire developers with this method.
Knowing these things will make you a better recruiter.
It will also help with outsourcing mobile development work easier and make you good at negotiating the cost of hiring.
For the full mobile application development outsourcing process, make sure to read till the end of this guide.
We will talk about everything related to application development outsourcing in the following chapters.
4. Use LinkedIn to Find the Right People
LinkedIn is a professional social networking channel.
Here, you will find the contact information of a large number of developers and designers.
The best part about this platform is that you won’t have to chase the people, but they will contact you for work.
To outsource your mobile app development world from LinkedIn, follow a few things:
- Grab attention: While posting your requirements, mention mutual connections.
- Conversational Posting: Make sure that your tone of job post is conversational and not too professional. Talk to people and stay human.
- Review Profiles: Review the profiles of the people who respond to your job post. Check their LinkedIn profiles to gather social proof.
Once you have a list of potential people, share your ideas with them.
Keep in mind that LinkedIn is a professional network.
So your requirement sharing has to match your narrative.
Use specific data about your app idea that you have generated and share whitepapers of the product.
This will give the developers a better idea of the work.
5. Get Recommendations
When you start a startup, your friends, relatives, colleagues, and family become a source of inspiration and consultation.
We want you to use your ties with everyone you know and ask them for recommendations.
Word of mouth is still the most powerful tool of persuasion.
92% of the customers trust their friends and relatives over other media sources.
So, when you are searching for people to outsource mobile app development, ask your network first.
If they have worked with a group of freelancers or an agency before, they will let you know and give an unfiltered review.
These are the five ways to find an agency or freelancers for mobile app development outsourcing.
It is better if you keep your focus on choosing an agency.
This is because an agency is approachable and you will get access to a wide talent pool under one roof.
This reduces management woes and makes communication easier.
Choosing an Outsourcing Company
Outsourcing application development can boost your work.
But it is only possible if you get your hands on the right agency for application development outsourcing.
Make sure to shortlist the potential agencies before you can outsource mobile app development.
We recommend that you look at three things before outsourcing application development.
1. Potential to Help You Succeed
There is no measure to determine an agency’s potential but we want you to leverage your skills as a business person.
Listen to your gut feeling when it comes to understanding the potential. Or you can use some SaaS service to find out more about your shortlisted vendors.
You might have heard people say that you should look at the facts. Or something like data speaks best. All of these are true and relevant.
But sometimes, our understanding of something via a gut feeling outruns all the data and metrics.
So, we want you to observe the potential service provider closely.
Rank them in terms of helping you create the right product. To do this, you can take help from two things: communication and customer reviews.
Communication plays a major role in outsourcing your application development work.
When you talk to the service providers, their communication needs to be legible and clear. This includes the understanding of the concepts and the tasks needed to complete the work.
Another way is to look at customer reviews and review social media post. For this, look at the social proof at the agency’s social media accounts. You can also check:
- LinkedIn,
- Their website,
- Other listing websites like Clutch, Good firms, etc.
- To make your job just a little bit easier, we have made this list of the best IT outsourcing companies. Check them out to narrow down your choice.
2. Expertise
Any outsourcing agency can list out the application development services they provide on their website. Writing about them is one thing and actually delivering that is different.
You might come across agencies that promise to deliver a food ordering app with proficiency. But you should not just go with what they have to say.
Another way to look at their expertise is by looking at their case studies. Case studies help you with two things:
- Identify the agency’s work experience via past experience.
- Help you in finding their ability to deliver the product corresponding to the set of requirements.
Let’s say that you find a case study on the agency’s website where they have made a clone of an app like TikTok or Uber-like app.
It would be great to explore the requirements and the way developers have worked on it. Do this before you move forward with outsourcing software development.
3. Cost of Services
This might be one of the most important aspects to look at for mobile development outsourcing.
Application development outsourcing agencies must be judged on multiple parameters:
- Expertise
- Services delivery
- Potential
- Team composition
- Cost
We put cost last because if all the other variables are suitable, the charge is justifiable.
Some companies want to get paid on an hourly basis, while others prefer fixed price rates. Some want to get paid upfront, and some are good with getting paid afterwards.
Let’s take a look at a spreadsheet with 3 critical factors of outsourcing app development costs.
| Factors | Description |
| Cost by region | For example, a company from the USA, the UK, and Western Europe will charge higher than their counterparts in Eastern Europe, Latin America, and South Asia. |
| Cost by business needs | For example, for iOS app development, you will hire Swift developers. If you are interested in iOS development, check out these best iOS development tools But if the tasks change and you’ll need an Android app, you will have to look for and hire Kotlin developers separately. From basic apps to feature-rich solutions, our guide to Android app development costs explores the key factors that affect pricing. But it is possible to save budget by hiring React Native or Flutter developers. |
| Cost by complexity | For example, if you need a web app and a mobile app, the costs will be higher. The complexity of the app also plays a significant role. If it is a complex app, it is going to be expensive. The costs of mobile development outsourcing cover:
|
Some agencies might also help you with startup marketing strategies. This may increase the final cost too.
But you won’t have to worry about creating ad campaigns or running complex strategies to promote your product.
Use the CPM calculator to keep ad spending in check and find the right balance for reach and budget.
The next step in application development outsourcing is understanding the agency’s workflow.
Outsourced Mobile App Development Process
As a newbie, it is essential to understand the process.
This workflow has helped us successfully deliver projects while keeping in mind the cost of mobile app development.
There are three streams to the mobile app development stages that every outsourcing agency must follow:
- The planning phase,
- The development phase,
- And the maintenance phase.
Planning Phase
Pre-development implies the activities and tasks you must expect your outsourced agency to cover before the development work begins.
For example, we cover three things under this part of the job.
| Part of the Job | What Do We Do? |
| Initial Interview | This is the part of the job where you must talk to the agency that takes on the task. The motive is to:
While covering this step, you must also share your perspective and requirements. Set your expectations straight, and then work on judging whether or not the agency can deliver on that. Ask questions related to:
The motive is to understand how the potential agency will work when you outsource mobile app development. |
| Rough Estimate | Knowing the cost is also essential. This way, you can start planning your budget. The cost to outsource mobile app development depends on the documentation and the design. Note that, at this stage, everything is on a rough piece of paper. So the final cost of designing and mobile outsourcing development can change. You must be prepared to share:
The documentation includes:
The rough UX is the idea of the design of the application. This includes the screens, their layout, button placement, among other things. Either prepare a rough sketch of the application that you want. Or ask the outsourcing mobile app development agency for the same. |
| Signing an NDA | This is one of the biggest mistakes that new founders make while outsourcing application development. In a competitive world, the one who has the idea and delivers the product first has more benefits. A Non-Disclosure Agreement restricts the agency from sharing information about your product with any other entity. Violation of the NDA makes the agency liable to pay for any damages. |
The second set of activities in the pre-development phase talks about five major steps of mobile development outsourcing:
- Detailed Interviews
- Documentation
- UX Design
- Tech Solutions
- Detailed Estimate
| What To Do and Expect? | Its Importance |
| Detailed Interviews | The initial interviews were more of an introductory round. These are the detailed interviews. You have to ask everything about application development outsourcing in detail:
It will be great to look at four variables for the interview:
|
| Documentation | The documentation part includes:
Other than this, it also includes the details about the application. Initially, it will help the developers understand the product. Later on, the same document with some modifications will be a tool for customer support executives. Helping them understand how it works and assist customers do the same. |
| UX Design | User Experience is one of the most important parts of mobile development. Outsourcing your work must be done to an agency that understands its role in application development successfully. Without effective UX designing the application will not work as per the customer expectations. So, the outsourcing company working on your application development must:
|
| Tech Solutions | This is the part where the application development outsourcing agency needs to provide a list of tech stack. Tech stack implies the planning, designing, and development of technologies or tools required. Not all development tools are apt to build every type of application. Depending on your requirements and product, you must ask for the relevant tech stack. |
| Detailed Estimate | If and when all the above-written requirements are good to go, you can ask for a detailed estimate. This will include listing out the cost and time required to build every part of the application. The application development outsourcing agency must provide a detailed estimate. Ask the mobile development outsourcing agency to send a complete list of the features. Ask them to include the hours required to build them. Segregate list into designing, frontend, backend, DevOps, project management, and business analysis. Because until this point, no coding has started, you can always switch to another agency if required. Discover which DevOps trends are set to impact the future of software development. |
Once you have the list of steps and a detailed estimate, the development begins.
Development Phase
The flexibility of the work scope and revisions is one of the greatest benefits of in-house development.
With outsourcing app development, most companies will have a limit of revisions and feedback rounds.
Any changes in the requirements and constant feedback will increase the cost.
The in-house development team offers a countless number of tweaks at no extra cost.
So, when you outsource app development, look for an app development company that follows these three practices:
| Practices To Follow | Meaning and Scope |
| Agile Management | Agile application development means using an iterative approach. In other words, this is a practice where:
Due to an iterative approach, you can build a customer-centric platform. Learn more about the Agile discovery process and why it is important in this guide. |
| Constant Communication | While developing the application the outsourcing agency must also make an effort to:
Not communicating with each other leaves out more scope for inconsistent development. Furthermore, a mobile app development outsourcing agency that does not communicate is not a good partner. So, while taking interviews, you must fix a schedule for communicating with each other. |
| Constant Demos | This must be a part of your agreement with the app development agency to whom you outsource. Providing constant demos strengthens agile management practices. Not only this, while getting demos, you can carefully examine the application and suggest changes. |
The last part of the workflow is marketing.
Now not all agencies will have a marketing team.
But prefer mobile app development outsourcing application development to agencies that also provide marketing services.
Ok, now that you know how to develop an application, let’s talk about the cost of development.
Outsourced App Development Cost Comparison
To quickly get you up to speed on the comparative cost of mobile app development, let’s take a look at the table. We’re talking about a hybrid app that took 1000 hours of development.
| Type of team | Average cost |
| In-house team in the US | $110,000 |
| Local agency in the US | $150,000 |
| Freelancers in South Asia | $40,000 |
| Outsource agency in Ukraine | $60,000 |
Various factors determine the cost of outsourcing application development. This includes:
- Project management,
- Business analysis,
- UX/UI design services,
- Mobile development services,
- Backend development,
- QA testing,
- DevOps services,
- Maintenance.
The most common method of application development outsourcing cost is “by the hour.” Developers and designers charge you an hourly rate based on the hours they spend developing your app.
To understand the cost calculation, you need to know the players of your dream team:
- UX/ UI Designer
- Project Manager
- Backend Developer
- Frontend Developer
- QA Tester
We have also talked about business analysis and marketing in the process.
Plus, there is another person that you may require, Chief Technical Officer (CTO).
But, we won’t be listing out the cost of hiring them below.
Here are 4 case scenarios:
- Hire an in-house team
- Work with local based agency
- Outsource mobile app development
- Hire freelancers
Based on the team composition, here is a cost analysis for these 4 methodologies that help you compare outsourcing development cost-saving.
Option 1. In-House Team
The cost to hire a team will depend on the salaries the team members will receive.
Here are estimates from Glassdoor, Salary.com, and PayScale.
- Designer: $85,000 per year
- Project Manager: $89,000 per year
- Backend Developer: $77,500 per year
- Frontend Developer: $119,000 per year
- QA Tester: $58,000 per year
These are the average salaries.
The final cost of hiring may depend on the experience and expertise the person brings to the table.
| Pros | Cons |
|
|
Should you choose this, you will be able to develop a fantastic product. But it will come at a high cost. And during the initial stages of starting a business, you must work on cost savings.
Option 2. US-Based Agency
A US-based agency means that you will get to work with a team situated in your time zone. The guys in the team will relate to your work, ideas, and scope of work with more confidence.
When you start app development process, you will end up paying for an hour’s work. As the number of hours increases, the cost also climbs.
The per-hour prices of hiring developers and designers in North America have an average of $150 per hour. So, to build your mobile app in the US for a 1000 hour project, you will spend $150,000.
| Pros | Cons |
|
|
Should you choose this, the mobile development outsourcing cost will be high.
Option 3. Freelancers
Choosing freelancers from a global talent pool can help you save in terms of cost.
Platforms like Upwork, Toptal, and others have a large repository of developers.
While choosing freelancers to work with you, make sure to vet them.
Ask for their experience, GitHub accounts, and projects they have done, and testimonials/feedback from their previous clients.
The average cost to hire freelance developers and designers falls between $20 to $40 per hour.
This means that you may have to pay between $20,000 to $40,000 for a 1000-hour project.
| Pros | Cons |
|
|
Should you choose this, be prepared to put in an extended number of hours for management.
Plus, freelancer’s quality of work cannot be verified and not everyone will be able to communicate efficiently.
Option 4. Offshore Agency
Outsource to the Indian Team
As a part of application development and outsourcing, India is on a leading frontier.
The average hourly price ranges between $15 to $30.
The reason for this is high competition and lower labor costs.
| Pros | Cons |
|
|
Should you choose this, make sure to run a complete verification of the agency to whom you outsource mobile app development. Also, sign an NDA.
Outsource to the Latin American Team
The Latin American mobile development outsourcing market is relatively new and growing.
This does not mean that the developers and designers here are new.
But the application development outsourcing model is new to them.
That is why they charge between $20 to $40 per hour.
This makes the total cost of app development outsourcing between $20,000 to $40,000 for a 1000-hour long project.
| Pros | Cons |
|
|
If you choose this, prep yourself to train the agency or dedicated development team to navigate the process.
You may have to spend more time working than usual.
Outsource to the Ukrainian team
Ukrainians are avid developers and are known across the globe to create great products, including mobile apps.
The average cost to hire a team from Ukraine is between $30 to $50.
So, to outsource mobile app development to these guys means you will be between $30,000 to $50,000.
| Pros | Cons |
|
|
Should you choose this, you will get an amazing product at cost-effective prices.
Mobile development outsourcing agencies in Ukraine also have dedicated marketers on their teams.
This makes your search for a separate marketing team redundant.
If you need to explore the mobile app development outsourcing geography for a deeper investigation, check out this guide where we cover best countries to outsource software development.
Now you have a complete guide on outsourcing mobile app development in a great way to save on costs and time.
You can devote the extra resources on your hands to focus on other parts of business development.
We have also listed out different teams and types to choose from along with their costs.
If you want to talk more about your project and how we can help you build an app, read further.
Before starting your project, explore the detailed breakdown of app development costs to avoid surprises down the line.
Want To Find A Reliable Partner?
At SpdLoad, we have years of experience helping founders and business owners turn ambitious app ideas into reality.
Based in Eastern Europe, our expert team specializes in building high-performing, complex applications from the ground up.
For example, we created the gift list and web scraping app MyWishApp. This multifaceted application required over 2,000 development hours from a 12-person team. It’s now setting trends in its market.
Our expertise spans planning, UI/UX design, development, quality assurance, and beyond.
Let’s connect to explore how SpdLoad can turn your big app idea into a high-impact product.
Here you’ll find a summary of our in-depth guide. Learn the highlights how outsourcing mobile app development.
Bonus Infographic
Here you’ll find a summary of our in-depth guide. Learn the highlights how outsourcing mobile app development.
Want to Find a Reliable Partner?
At SpdLoad, we have years of experience helping founders and business owners turn ambitious app ideas into reality.
Based in Eastern Europe, our expert team specializes in building high-performing, complex applications from the ground up.
For example, we created the gift list and web scraping app MyWishApp. This multifaceted application required over 2,000 development hours from a 12-person team. It’s now setting trends in its market.
Our expertise spans planning, UI/UX design, development, quality assurance, and beyond.
Let’s connect to explore how SpdLoad can turn your big app idea into a high-impact product.
